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A role reversal for UTI-1 helmsman
Freny Patel & Nimesh Shah in Mumbai | April 23, 2005 12:51 IST
The plush office at UTI Tower in suburban Bandra Kurla complex belies the fact that its assets are up for sale.
On a grand teak table in a palatial chamber stands a flat screen plasma TV. There, S B Mathur rarely takes his eyes off television business channels, keenly following the movements of share prices.
Ironically, this time, he is on the other side of the fence -- as an institutional buyer turned seller. Mathur was earlier chairman of the country's largest financial institution, the Life Insurance Corporation.
Now as the administrator of the specified undertaking of the Unit Trust of India or UTI-1 -- a post he was appointed to in December 2004 -- his sole mission now is to hawk UTI-1's holdings in equity and real estate.
An onerous task? May be.
Regarded as a successful fund manager at UTI-1, Mathur has been able to offload part -- Rs 10,000 crore (Rs 100 billion) -- of the entity's Rs 30,000 crore (Rs 300 billion) share holding in the last few months, riding the bull run in the capital market.
This is in complete contrast to his responsibilities at LIC -- to buy stock to prop up the market, check volatility and ensure stability.
Going by its investment department recommendations, during Mathur's tenure LIC had in the last two years bought Rs 18,000 crore (Rs 180 billion) of securities from the secondary market, booking a neat gain of Rs 5,000 crore (Rs 50 billion).
It is obvious that Mathur doesn't savour his new role. "Earlier I used to spend just five to 10 minutes on LIC's market operations, where volumes were far greater," he says.
Now most of his time is spent in figuring out how best to offload UTI-I's assets, both in terms of equity holdings and real estate. "The difference is that I am now working for an organisation that is no longer alive and kicking," he adds.
Mopping up Rs 10,000 crore wasn't a cakewalk. With employee apathy, it required determination to push through a sale of 4 crore SAIL shares to LIC.
"I had to put a sense of urgency into the staff at UTI-I," he says. If Mathur appears to be in a hurry, it's because time's running out for him. His one-year appointment ends on December 20, 2005.
That's why, of late, UTI-I has been an aggressive seller. Of the Rs 20,000 crore (Rs 200 billion) in remaining assets, about Rs 11,000 crore (Rs 110 billion) is in equity holding, of which Rs 7,000 crore (Rs 70 billion) is invested in 'sensitive scrips'. The balance is debt.
But he has to get the government's go ahead for his deals. With the powers that be still undecided on its gameplan, UTI-I's holding in ITC, Larsen & Tourbo, UTI Bank, Crisil, Icra, National Stock Exchange and National Securities & Depository Ltd (NSDL) are in a limbo.
With the way things are going, Mathur isn't optimistic about getting a premium for the sensitive blocks, as both state-owned banks and financial institutions are keen to buy them, he says.
The ITC shares alone are worth Rs 3,800 crore (Rs 38 billion) as per Tuesday's closing price). Mathur would perhaps prefer to sell UTI-I's shares not to the banks and the institutions but to others so as to get a premium price,
though he doesn't say so.
Yet in a way, Mathur's LIC post was no different from this. There was always a hotline between the finance ministry and the financial institution in terms of ensuring stability in the market.
Clearly, shopping for assets is better than unloading them. And nobody knows this better than Mathur.